Knaus Tabbert AG ($KTA)

Good morning, ladies and gentlemen, and a warm welcome to today's earnings call of the Knaus Tabbert AG following the publication of the first quarter results of 2026. I'm delighted to welcome CFO, Radim Sevcik. So he will speak in a moment and guide us through the presentation, followed by a Q&A session where we would be happy to take your questions. And having said this, Radim, I hand over to you.

Thank you very much. Good morning, everyone, and welcome to our first quarter '26 call. Thanks very much for joining. It has not been very long since we last spoke, and as a result, and luckily, there is no dramatic change in the overall picture or our strategy. The company remains focused on executing the plan that we discussed previously. Working on our product initiatives, operational improvements, sales and dealer management, cost-based adjustments and making sure that we keep a very tight working capital discipline. The first quarter should be viewed primarily as a quarter of continued execution, further operational stabilization and also showing visible benefits from measures implemented last year and early this year. This presentation is intentionally focused on the key developments and the genuinely new information, not repeating the messages that we've covered 6 or 7 weeks ago when we last spoke, but we're obviously happy to discuss additional details in the Q&A afterwards. Now let's move to the first slide. The first quarter '26 reflects a significantly healthier and more standard operating quarter for Knaus Tabbert. The EBITDA improved materially year-on-year, which happened despite lower reported revenue. This reflects operational improvements as well as a more normalized business environment because Q1 2025 was quite not a normal comparison quarter. At that time, operational productivity in early '25 was heavily disrupted with all the measures that we were implementing, and also reported revenue in Q1 '25 benefited from unusually high inventory reductions. The large amount of older inventory that we sold down at that point was part of a deliberate effort to reduce the company inventories, support dealer destocking and normalize the overall channel environment. Many of the units that we sold and the inventory change, the EUR 55.5 million you see there that we then realized, were sold with substantial discounts. And as such, they carried comparatively low margins. As such, first quarter 2026 represents a healthier revenue profile with significantly lower inventory effects and also healthier operational economics. The total output, as you can see, increased by 1.3% and as such remained relatively stable and also reflects current operational capacity and efficiency levels. If we look at the order book, the order backlog remains broadly stable versus prior year, but with a slight increase, and it reflects the market dynamics that we discussed with you previously where our dealers today operate much more cautiously. Their ordering behavior is increasingly driven by visibility and sell-through rather than a substantial inventory buildup, which is healthier structurally, even if it leads to somewhat lower backlog visibility than in past years. Overall, we view Q1 as an encouraging step in the normalization and stabilization of our business. If we move over to the cash flow and working capital slide, Q1 2026 was also a relatively normal and healthy quarter when it comes to our cash generation potential. The positive cash flow was supported by both operational performance as well as disciplined working capital management and a controlled investment activity. We've generated EUR 32.6 million in operating cash flow, where working capital development was supportive as is seasonally typical in this period. We've generated -- or rather, we've generated a negative EUR 2.1 million investing cash flow, which is a comparatively low number, and it shows that we've remained very selective and disciplined in our investment spending, focused primarily on necessary operational and product investments. And this allowed a strong free cash flow generation in the quarter that we then used primarily to service our interest obligations and reduce our financial liabilities. If we then look on the left-hand side of the slide, the charts there illustrate a year-on-year development. So it should be noted that these are not sequential quarterly movements but these are year-on-year comparisons. As you see towards -- or compared to Q1 2025, our inventories reduced significantly. That is an impact that you've, obviously, already seen in our prior quarters, and the level that we've -- that we're operating at in Q1 2026 is a stable level for a company running the level of production that we are right now. When it comes to our receivables and payables, these also reflect a more normalized operating environment, especially on the receivables side. You see less distortion coming from exceptional inventory reduction measures and also a better alignment between our production, our deliveries and our dealer activity. On the payables side, there is still very low credit insurer line availability, which is impacting our ability to increase payment terms with our suppliers. Overall, Q1 '26 represents what we believe a rather sustainable operating first quarter for the business that we're running right now. If we move to the next slide, it covers the market environment and registration data. This slide helps put both the market development and also our own market position into context. On the left-hand side of the slide, you see the registrations in both Europe and in Germany as our largest market, and also the split between caravans and motorhomes. On the right-hand side, you see our market share development in the respective segments and geographies. At first glance, the registration data shows a very strong increase year-on-year. However, it is very important to understand that these figures were materially influenced by onetime regulatory effects especially in February 2026. The reason is that a significant number of vehicles were registered ahead of the expiry of the Euro 6d derogation period. The dealers registered remaining eligible vehicles before the regulatory deadline, and these were primarily vehicles already sitting in dealer inventories. As a result, registration figures were temporarily inflated, but this should not be interpreted as a comparable increase in underlying end customer demand. Without this effect, the underlying retail demand has remained comparatively stable. The registration growth, as such, then overstates the actual market improvement. But at the same time, again, the level of stability in the market shown in the first quarter figures is there. When we look at our market shares in Europe, the overall market share development remained relatively stable. You see an increase in caravans where we continued to perform well and a stability on the motorhome side. In the motorhomes, the market share, especially in Germany, was somewhat lower year-on-year, and there are several reasons for it. First, the comparison period in '25 benefited from significant sell-down of existing inventory. A number of older motorhome products were sold at attractive pricing levels, and these vehicles then translated into more positive registrations in the market. Second, we're currently refreshing and further strengthening parts of our motorhome product portfolio, as we've covered several times, I think, already. This intends to improve the competitiveness and support our future market positioning and that product renewal process is progressing according to plan. Thirdly, the registration effect in February also impacted our -- the comparability of figures. Since both our own inventories and dealer inventories have already been substantially normalized, our exposure to these onetime registrations was comparatively lower than for some of our peers. In a way, this reflects the fact that much of our older inventory had already been cleared earlier. That is, I believe, positive as a reflection of the efforts that we've made last year. At the same time, it does have an impact on the registration figures that you are looking at. If we then conclude on this slide, we view the registration data in Q1 less with enthusiasm that these increases would indicate more with caution in terms of stability of the market and the headline growth rates being distorted by the temporary registration effects is something that should be taken into account. Now if we move to the final slide of this relatively short presentation, based on -- or on the back of the results of our first quarter, the Executive Board can confirm or reconfirm our guidance for the full year 2026, where we continue to expect to achieve around EUR 950 million in revenue and an adjusted EBITDA margin in the range of 5% to 7%. This would conclude the presentation side, and I would now like to open up to questions.

[Operator Instructions] We will start with the questions from Ingo Schmidt.

This is Ingo from Montega. It is good to see the operational progress in Q1, particularly the significant improvement in free cash flow. I have 2 questions regarding the sustainability of this performance and your product mix. First, you achieved a strong EBITDA margin of 6.3% this quarter. Looking beyond the low base effect from Q1 2025, which was impacted by the inventory clearing at lower prices, how confident are you that the structural cost savings will keep margins stable at this level for the rest of the year? And second question, we see a very positive trend in your camper van segment with an 80% increase in units sold. Could you tell us more about the demand for these models? Do you see the segment as a key driver to balance out the current challenges in the broader motorhome market?

Thanks, Ingo. So when it comes to the margin confidence, I probably have to be relatively prudent. In the end, our guidance, 5% to 7% adjusted EBITDA margin, indicates to you where we believe we should be landing for the full year. Q1 is pretty much in the range. And as such, we do believe that this particular performance of our business in terms of marginality will be delivered across the full year. Now clearly, that depends on all of the various effects that go into the EBITDA calculation, be it our revenue performance, be it the material costs that we will continue having, be it the margin we can generate on the vehicles that we sell into the market and the end customer demand, et cetera, et cetera. But right now, with the visibility that we have and with the performance that the business has delivered in Q1, we're relatively confident that the guidance that we've provided is -- can be reconfirmed. When it comes to the camper vans, it is indeed a very interesting segment for us. It's been also a very successful segment. What I think is really important to highlight there is the importance of introducing new products because ultimately the reason why our camper van segment or one of the reasons why our camper van segment is actually comparatively stronger than our motorhome segment, is that the camper vans -- the product range has been renewed relatively recently. And you can see that, that has a very strong impact on the end customer demand. When it comes to our motorhome segment, that's exactly where we want to be headed in model year '27, which starts in the summer this year and also model year '28, where we believe that with the new products that we plan to introduce into the market, we'd be able to more competitively perform there as well. So in general, I would not say that we want to compensate the camper van -- with the camper van segment, we want to compensate the motorhome segment. We'd rather want to strengthen the motorhome segment as well. That will be more our strategy.

That was very helpful. I wish you and the whole team much success for the rest of the year.

Thank you very much.

And then we had a virtual hand from Ellis Acklin.

I have one question for right now. Looking at the margin improvement in Q1, how much would you attribute that to some of the structural cost actions versus product mix or your production phasing and maybe the inventory drag that you had last year? So just kind of want to get a better understanding on what the main drivers for that improvement.

Sure. I mean ultimately, the way I look at Q1 2026 is that we finally managed to have one quarter where the company could to a large extent perform in a reasonable, sustainable way. We had much less disruption, much less one-offs. There was -- there were clear orders. The distribution channel has been largely cleaned up. And this is a reflection of where we stand right now operationally. So I would say it is ultimately a result of all of the above that you mentioned. No less disruption compared to 2025, but also all the cost actions that we've taken both on the overhead side as well as the, let's say, initial steps towards productivity improvement also in the variable costs. And as such, Q1 for me is truly the base from which we should be striving to improve further. I would really look at it that way. Comparing it to Q1 '25, you can certainly look into the individual items that build it up. You can look at our material [ costs ] being now a little bit lower, a relative stability on the personnel costs, but lower other operating expenses where we've also generated further savings. You can always split it into these little bits. But ultimately, the most important thing is really to take Q1 2026 and to improve on that, and that would be our ambition going forward.

Okay. Just a quick follow-up on that. Would you -- would it be fair to say that Q1 is sort of close to the blueprint you've been aiming for, for literally several quarters now to get a normalized business performance?

That would probably be maybe too strong of a statement, but it is certainly the quarter that we've been partially hoping to have in Q4 last year had it not been for the chassis disruptions and all the other impacts that we had there. There was certainly part of our plan and part of our budget last year was that Q4 would be the, let's say, the first undisturbed full production quarter. That has not happened. And so Q1 is the first indication of where we should be headed. Now it should not be considered a blueprint as such because, as you know, well, first one -- first thing, we've introduced further measures. We've made further personnel and cost cuts in the organization in January and February this year. We are running multiple initiatives to further improve productivity, but also look into our input costs and other elements as well as working hard on the product range to make sure that we can truly compete with our products and possibly also enhance our margins on that side. So overall, let's say, our ambition would be higher, but also, let's be quite realistic. The reason why the guidance for the full year is 5% to 7% adjusted EBITDA is that many of these impacts that we would like to introduce into that business will take some time to work themselves into the system, point one. And point two, ultimately, a lot is then also dependent on what the end customer demand looks like and also overall a business environment. I think we've highlighted in our report quite extensively the most recent things that I think many businesses right now are looking at, and that is the development in raw material prices, potential disruptions in supply chains, and also a relative, let's say, careful behavior by end customers across consumer discretionary. And so these are all the things that we also need to look at. So blueprint is probably too strong of a word, but definitely a first quarter where one can sit and say, okay, this is where we managed to deliver what we set for ourselves for that given quarter.

Okay. If I can be so bold, one quick follow-up and then I'll jump back in the queue. Would it then be fair to say -- so macro issues aside, but it sounds to me like you're not fighting the market as much now and it's more about optimizing things internally. Would that be fair?

When you say fighting the market, do you mind elaborating on that a little bit, please?

Well, I mean, the theme for quarters now has been the dealers specifically.

Yes. Well, again, I do believe, and that's what we mentioned in the past few quarters as well that, that particular situation has been addressed quite substantially. So you're right, in that sense, we're not trying to fight the market. We're obviously fighting in the market with our products to make sure that if some of our competitors still have residual stocks or if the end customer demand weakens, that we remain competitive and we can hold, let's say, healthy margins and make sure that we deliver what we provided as guidance to the market. And then, yes, we're then mostly focused on making sure that we do things that we can control, which, to a large extent, is making sure we have the right products and that we produce them in an efficient way. So you're absolutely right. Right now, the focus is very strongly internally, but that internal focus includes also our products, which then impact our situation externally.

Radim, that's great. From my side also, all the best for the rest of the year.

Thank you very much. Thanks.

So ladies and gentlemen, before we move on with Johan van den Hooven, so by now he's the last one who has questions. [Operator Instructions] So Johan, we are now ready for your questions if there are still open topics.

Johan van den Hooven, Value8. I have 3 questions. I will do them one by one. We have talked about the guidance -- full year guidance for EBITDA. I want to talk about the full year guidance for revenue, perhaps less important than EBITDA, but revenues were down 15%, 16% in Q1. Guidance full year is minus 5%. Can you give us a bit more detail how you want to see an improvement in the coming quarters? Is it market? Is it mix?

Johan, let's go -- I assume you indicated you want to go one by one, so let me maybe take -- you're right, the revenue has decreased compared to Q1 2025. But what should not be underestimated is the impact of the inventory change because ultimately what was happening in Q1 2025, and I think we've been quite open to the market about it, that our -- the only way how we can build a stable, healthy business is to make sure that we address the issues that we were carrying with us. And the biggest issue, or one of the biggest issues that we were carrying with us, was certainly that what the company managed to do in 2024 is largely block the distribution channel and at the same time produce vehicles on stock. And so the Q1 2025 was impacted very heavily with us looking at, one, making sure that we clean up our balance sheet, but also support the dealers in cleaning up theirs. And at the same time, we were fighting very heavily with high insolvencies at the dealers where we had to buy back vehicles from the dealers and place them back into the market. Now at that time, the logic was you could either say, I want to retain my profitability and I will be dragging these things on for quarters on end and ultimately get there, or I can really try to support the market in this cleanup. And our plan was more the latter, i.e., really use the first 6 months of the year, which was -- and tends to be Q1, Q2 seasonally strong quarters also for end customer demand to make sure that we use that market to really place our products, generate liquidity, clean up the distribution channel and be able to properly start on firm footing as of September. And so the revenue in Q1 2025 should be looked at as partially revenue generated with, let's say, very -- for the end customer attractive prices, and for the dealers attractive prices of placing our products into the market. And that has generated the higher revenue. When it comes to our output, it is pretty much on the level that we had last year. To address the guidance topic that you asked about, we feel quite comfortable that the around EUR 950 million that we're guiding towards is achievable with the performance in Q1. I mean it's roughly 1/4 that we've now generated. And given that January is impacted by a production stop for the first 2 weeks of the year, and February is a short month, 1/4 generated in the first quarter of the year is roughly spot on.

Okay. There's an additional question about the inventory, and you had some more problems in the luxury segment with -- well, problems with competitors with -- they want to get rid of their stock at low prices. Has that -- does it belong to the past? Or is that still ongoing in the luxury segment?

It's -- I would not say it belongs to the past, but I wouldn't say it's ongoing. It's basically -- the situation has significantly improved. And also with our competitor as far as we understand from the information that we have available. We also see -- and not only Stuttgart, but also business generated in February and March have been quite healthy in the luxury segment. And so we're relatively positive that, let's say, the first 2 quarters, we will still have some residual topics that we need to address in that segment. But beyond that, we should be generating the full margin that we would expect from that business going forward.

All right. That's good to hear. The next question is about net debt that has gone down nicely. Can you give us an update about your conversations/discussions with the banks?

So the banks are, as you -- as I think I informed the market, they are very closely tracking our performance. They're getting regular updates when it comes to where we stand. And we have multiple discussions scheduled in the coming weeks. We wanted to make sure that we get Q1 out of the way. Also, I think these are relatively healthy results that indicate where the business is and that quite a bit of work has been done. And on the back of these results, we will have multiple discussions coming in the coming weeks to really start talking in earnest with the banks about the next steps. So that is an ongoing discussion.

Okay. That's clear. Last question for now. You mentioned visibility and a question about your order book with EUR 363 million, still not a huge amount. What about the feeling of the dealers? Are they still hesitant to order? Has that improved?

No, that has not improved, and we actually don't even expect it to improve substantially in the short run. I think -- or we believe, that in the next quarters, potentially maybe even a year or 2, this level of very prudent behavior on the dealer side will continue. Ultimately, the industry has capacities to produce vehicles. And so the incentive for the dealers to stock themselves up with vehicles is relatively limited. So dealers can afford to have some level of visibility before they go ahead and order. Now clearly, there are incentives that the dealers benefit from to order early. And we are working very closely with our dealers to make sure that those incentives provide enough of an ordering push so that we retain the level of visibility that we would like to have. But we don't necessarily expect that particular behavior to change substantially. When it comes to the feeling of the dealers, that is difficult to comment on. But I can certainly say that the market is now relatively careful after the developments, especially geopolitically. There is a certain level of, let's say, holding back when it comes to the end customer demand. It's not quite substantial, but it's -- one can already feel it, and the dealers are obviously reacting to it. And we are in live discussions with all of our dealers to make sure that we track it carefully, how the end customer market is developing and if we need to, how we react to it. So overall, there is no exuberance among the dealers. There's also no depression. But everybody is now looking at the market and how it develops and wondering what the situation around the world is going to do to the market.

Thank you so much for your questions. So in the meantime, we did not receive any further questions. So therefore, we would come to the end of today's earnings call. So we say thank you for showing interest in Knaus Tabbert, and also a big thank you to you, Radim, for your time today. So from my side, I wish you all a lovely remaining Tuesday and hand back to you, Radim, for some final remarks.

Thank you very much. Thank you, everyone, for attending. Thank you to the team for having prepared the presentation and all the hard work that goes into this, and all the Knaus Tabbert fans and employees who work hard to make these things happen. And we just need to keep going. Thanks much, and have a nice day.